Microsoft Marketplace Insights
Microsoft’s Azure Marketplace currently features over 1,000 VM solutions from over 360 partners. Microsoft AppSource features over 200 solutions from 100 partners. This article addresses the value of being listed in the Azure Marketplace, the associated challenges, the current composition of marketplace offerings, and comparison with Microsoft’s AppSource marketplace.
Customer access is the primary partner motivation for getting listed in the Azure Marketplace. Enterprise customers with Azure contracts are encouraged by Microsoft to leverage Marketplace solutions. People with an Azure account can peruse the available offerings and download applications to run against their own Azure services contract. This is the preferred approach by Microsoft field sellers and is referred to as Bring Your Own License (BYOL).
Customers can also locate applications and services (including developer services, web applications, and data services) to run on the partner’s Azure instances. This catalog helps improve discovery by IT professionals at enterprise customers.
There is also a set of authentication solutions (using Azure Active Directory) which help with single sign-on authentication across cloud applications. These serve as a useful utility to existing apps but won’t drive significant customer awareness or trials.
In addition to customer visibility, partners obtain better alignment with Microsoft enterprise sales teams when they publish a VM to the Azure Marketplace. Co-selling with Azure Marketplace ISVs is a top priority for Microsoft in FY17, particularly where partner applications use the existing Azure contract of the customer (as an Azure Marketplace VM).
Microsoft has successfully sold Azure agreements as part of Enterprise Agreements. Because these Azure agreements reflect a block of pre-paid services, it is imperative not to leave excess unused services on the table at the end of the contract period. Otherwise, the customer will be reluctant to expand their Microsoft cloud consumption at renewal time. For this reason, there is substantial motivation (in the form of seller quota and subsidiary scorecards) to drive utilization of existing Azure contracts.
As a partner, if you deliver solutions that drive intense Azure consumption, you will receive preferred support from Microsoft sales and partner teams.
The act of automating the Azure Marketplace installation process can be a challenge for some ISVs, particularly those that require professional services to tailor their solution for each customer. Installation requires working with Azure Resource Manager templates to script the deployment (and all software dependencies). While sample templates are available, this effort takes away from other ISV development efforts.
While many partners have been listed in the Azure marketplace, some complain the onboarding process lacks structure and transparency. Of particular concern is the lack of visibility as to the status of their submission and the reasons for rejection. Microsoft has a team focused on revising the portal which will provide more clarity on publishing and certification progress (and expected SLA). Expect the first improvements to be seen in Q1 2017.
More importantly, the purpose of listing in the marketplace is to drive sales. However, customer leads (of those that download VMs from the Marketplace) are not shared with partners today. Microsoft is evaluating the amount of information to share, balancing the privacy requirements of the customer and the reporting needs of ISVs. Expect reporting to include customer lead info and high level Azure consumption starting in 2017. This will not only help ISVs follow-up on customer interest but also provide overall consumption reporting to incent collaboration by Microsoft field sales teams (they need to receive credit for working with ISVs in their accounts).
I recently reviewed all of the Azure Marketplace partner offerings. Of the 770 VM solutions, approximately 20% were provided by Bitnami (a company known for scripted application packaging). 70% of the ISVs offer a single Azure Marketplace listing. So for most, the learning curve of ARM template scripting isn’t reusable. However, there is an argument that providing a scripted deployment is a DevOps best practice; for ISVs not “born in the cloud”, the exercise could improve “deployability” of their solutions.
I would categorize the types of VM solutions as: security, storage/data management, DevOps, BI, media management, and open source platforms. There were some interesting industry specific examples (e.g. biotech), but most solutions were infrastructure/platform oriented. This makes sense because IT professionals and developers would have access to the Azure console and therefore know how to make sense of a VM solution from a partner. Note that some of the infrastructure solutions are also listed in the AWS Marketplace.
Microsoft AppSource was introduced at Microsoft’s Worldwide Partner Conference this July. AppSource is geared toward business decision makers, not IT. It doesn’t accommodate VM solutions deployed by IT, but rather features SaaS partner solutions. In particular, it enables discovery and trial of line of business SaaS solutions.
AppSource has a limited number of partner listings given its recent debut but If Microsoft puts marketing promotion behind AppSource, it could emerge as a significant value to Microsoft partners. Most of the currently listed solutions integrate with Dynamics with 30% of the 200+ solutions provided by the top 2 partners.
In summary, Azure Marketplace represent a moderate development investment by ISVs and is a good fit for solutions targeting IT within existing Azure enterprise customers. AppSource is a better fit for line of business applications implemented as a SaaS model.
If you would like to learn more about engaging Microsoft as a sales and marketing partner in context of your Azure solution, request an introductory meeting.